2013 (5) TMI 505 - HC - Service Tax

Recovery of service tax while appeal is pending before tribunal - recovery notice published in Daily News Paper Dainik Bhaskar dated 28-1-2012 - held that - it is clear that it is only a general notice issued to all parties/service providers to deposit the amount of due service tax/penalty/interest. The adjudicating authority has passed an order against petitioner demanding a sum of Rs. 1,64,499/- along with interest and penalty. The said order has been upheld by the Commissioner of Appeals. Petitioner has further filed an appeal before the Appellate Tribunal along with stay application and next date fixed by the Tribunal is 2-4-2012. A period of seven days was given in the notice dated 28-1-2012, but no property of petitioner has been attached and put to an auction. The writ petition was filed on 16-2-2012. The matter is already fixed before the Tribunal on 2-4-2012. If petitioner has any urgency in the matter, then a prayer should have been made before the Appellate Tribunal itself for early hearing of the stay application, instead of filing the present writ petition before this Court. - writ petition dismissed.

Summary

Issues:
Challenge to notice for recovery of service tax/penalty/interest, Urgency in staying recovery pending appeal before Tribunal, Application of Circular dated 2-3-1990 on recovery measures during pendency of appeal.

Analysis:
The petitioner challenged a notice issued for recovery of service tax/penalty/interest by respondent No. 1, directing deposit within seven days under the Finance Act, 1994, failing which recovery action would be initiated. The petitioner received a show cause notice in 2009 for non-payment of service tax, leading to a demand raised in 2011. Despite appeals, including one before the Appellate Tribunal with a stay application pending for hearing on 2-4-2012, the recovery notice was issued on 28-1-2012, prompting the petitioner's plea for staying recovery until the Tribunal's decision. The petitioner cited a relevant judgment in support of the stay application.

The Court examined the notice, finding it a general directive to all parties/service providers for tax payment. It noted the specific order against the petitioner for Rs. 1,64,499/-, upheld by the Commissioner of Appeals, with an appeal pending before the Tribunal along with a stay application scheduled for 2-4-2012. The Court highlighted the absence of property attachment or auction despite the notice, filed on 16-2-2012, with the Tribunal hearing already set for 2-4-2012. It advised the petitioner to seek an early hearing before the Tribunal if urgent, rather than filing the writ petition.

Referring to a prior judgment, the Court discussed the Circular dated 2-3-1990 prohibiting coercive recovery during appeal pendency before appellate authorities. However, it found the petitioner had not informed the respondents of this Circular, nor provided evidence of property attachment or auction notices. Consequently, the Court distinguished the prior judgment based on the lack of similar circumstances in the present case. Given the Tribunal's upcoming hearing date, the Court advised the petitioner to request an early hearing if concerned about property attachment, ultimately dismissing the writ petition for lack of merit.